How to correct rental income missed off SA return

How to correct rental income missed off SA return

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Hello everyone

I wonder if anyone could help me please?

In August 2012 my husband and I started to rent out office space in our house (which I rented rather than owned) to a friend's company. She uses the office space etc for working and storage. The cost associated with this are such that there is no profit or loss.We have a rental agreement that states the start of the agreement and that we share the income 50/50.

When I completed my 2013 tax return (my husband didn't complete one) I forgot to include the income from this rent. As such my return just had income from various employments.

I have just started to complete my 2014 tax return and realised my omission.

My questions are:

1. Can (or should) I amend my 2013 return and add the additional income and associated costs (there will no profit) or should I add the missed months onto the 2014 return figures?

2. Should my husband ask to complete a 2014 return. Should he also complete a 2013 return.

3. Are we going to get charged penalties because of this?

Thanking you in advance for any advice.

Rebecca

Replies (6)

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By andy.partridge
11th Oct 2014 15:20

Briefly

1. You can and should amend your 2013 return.

2. If ordinarily your husband does not need to file a tax return he will not need to under the circumstances you describe, but he should inform HMRC of his new circumstances, disclose revenues and costs and pay any additional tax arising. He might think it simpler to register for self-assessment.

3. You won't and your husband probably won't but his situation could potentially be a little more complicated.   

Thanks (1)
JC
By A_non
11th Oct 2014 15:55

No profit...
If there was no profit from rental then no need to report or amend the return

Going forward if profit anticipated then need to declare to HMRC on self assessment.

Thanks (1)
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By RebeccaFr
11th Oct 2014 16:19

Thank you but can I clarify

Thank you Andy and A_non for your answers.

I must admit to being slightly confused as unless I am misreading your replies they appear to contradict each other?

If it is significant there is no profit from either mine or my husbands share of the rental income as we share the costs 50/50 and the rental amount is based on these costs rather than adding extra for profit.

On that basis was I right in thinking it should go on my 2014 tax return - A_non's reply has thrown me whereas Andy's was more what I was expecting?

 

Apologies if this makes me sound stupid.

 

Thank you

Rebecca

 

Thanks (0)
JC
By A_non
11th Oct 2014 17:31

Bottom line is...
If no profit then no tax due to HMRC. They are not interested if no tax is due...

If you still want to declare a break-even position then you may do it but it will only generate extra work for you.

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By RetiredTax
11th Oct 2014 20:53

Rental income
A-non~ There may be genuine rental losses which can be c\f & set against future rental profits. In which case they should be claimed on the Returns ~ which would require amending that for the P.Y. & including that for the C.Y.

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By King_Maker
12th Oct 2014 14:45

@ RetiredTax - as rental losses are carried forward automatically, there is no need to amend the SA Return merely to claim them.

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